Zakir Hussein is a New Zealand tax resident. He works as a security officer in New Market and earns a salary. His other income comprises rental income and dividends received from various investments in New Zealand and Australia. Zakir recently engaged Naidu Accountants, to prepare his 2021/22 income tax return.

However, Zakir made little effort to check the completeness of the information that he had on hand and gather the required information and documents. Zakir is aware that his return will be prepared from the information provided by him to Naidu Accountants. Naidu Accountant subsequently used the information Zakir had provided to complete his 2021/22 tax returns. Zakir later discovered that he had omitted providing information on $12,000 of rental income he earned in this period in New Zealand and $1,500 of dividends income from Australian shares.

(a) Discuss whether you consider Zakir would be subject to a shortfall civil penalty. If he is subject to a

penalty, then what type of shortfall penalty is likely to be imposed. What can Zakir do to get any penalty

imposed to be reduced? Provide legislative references to support your explanations.